The phenotype and development of T cells from transgenic mice expressing a T cell receptor with specificity for insulin presented by the MHC class Ib molecule Qa-1^b was investigated. Peripheral T cells from the transgenic mice express CD8 and, after activation, kill Qa-1^b-positive lymphoid target cells in the presence of soluble insulin. Thymic selection requires expression of Qa-1^b but not the dominant Qa-1-associated peptide, Qdm. In contrast to conventional T cells, selection is at least as efficient when the selecting ligand is expressed only on hematopoietic lineage cells as compared to expression on epithelial cells in the thymus. Our findings suggest that there is a dedicated population of Qa-1-restricted T cells that are selected by interaction with Qa-1 and that the cellular requirements for selection may differ from conventional T cells.